Exhibit m(iii)
CLASS R SHARES DISTRIBUTION PLAN
PURSUANT TO RULE 12b-1
DISTRIBUTION PLAN (the "Plan") made as of the 1st day of October, 2004, by and
between HALLMARK INVESTMENT SERIES TRUST, a Delaware business trust (the
"Trust"), on behalf of each of its series listed on Exhibit A, as such Exhibit
may be amended from time to time (each a "Fund" and collectively the "Funds"),
severally and not jointly, RESERVE MANAGEMENT COMPANY, INC. ("RMCI"), a New York
limited partnership and RESRV PARTNERS, INC. (the "Distributor"), a New York
corporation, all voting stock of which is owned by RMCI.
WITNESSETH:
WHEREAS, each Fund is engaged in business as an open-end investment company
registered under the Investment Company Act of 1940, as amended (the "Investment
Company Act"); and
WHEREAS, the Trustees of the Trust are authorized to establish separate classes
of shares relating to each Fund, and have established and designated two or more
classes of shares of each Fund; and
WHEREAS, the Distributor is a securities firm engaged in the business of selling
shares of investment companies either directly to purchasers or through
financial intermediaries, including without limitation, brokers, dealers,
retirement plans, financial consultants, registered investment advisers and
mutual fund supermarkets ("Financial Intermediaries"); and
WHEREAS, RMCI is the investment adviser to each Fund, pursuant to an investment
management agreement; and
WHEREAS, the Trustees of the Trust have determined that it is in the best
interest of each Fund and each Fund's shareholders to offer its shares for sale
on a continuous basis on the terms and conditions set forth in the registration
statement of each such Fund as it may be amended from time to time; and
WHEREAS, the Trust on behalf of each Fund proposes to enter into a Distribution
Agreement with the Distributor, pursuant to which the Distributor will act as
the distributor and representative of each Fund in the offer and sale of the
Class R shares of beneficial interest (the "Shares") of each Fund, to the
public; and
WHEREAS, the Trust on behalf of each Fund desires to adopt this Plan pursuant to
Rule 12b-1 under the Investment Company Act pursuant to which each Fund will pay
a fee to the Distributor with respect to the Fund's Class R Shares; and
WHEREAS, the Trustees of the Trust have determined that there is a reasonable
likelihood that adoption of the Plan will benefit each Fund and its Class R
shareholders;
NOW, THEREFORE, the Trust on behalf of each Fund hereby adopts, and RMCI and the
Distributor hereby agree to the terms of the Plan in accordance with Rule 12b-1
under the Investment Company Act on the following terms and conditions:
1. The Fund shall pay the Distributor, with respect to the Shares of each
Fund under the Plan, a fee (the "distribution fee") at the end of each
month at the rate specified in Exhibit B of average daily net assets of
such Fund, to compensate the Distributor for providing, or arranging for
the provision of, distribution assistance or account service activities
(the "Services") with respect to Shares and the
By:
Class R shareholders of each Fund. Expenditures under the Plan may consist
of payments to Financial Intermediaries for maintaining accounts in
connection with the Shares and payment of expenses incurred in connection
with sales or account services activities, including assistance in
connection with inquiries related to shareholder accounts.
2. The Distributor is not obligated by this Plan to execute an agreement
with any Financial Intermediary.
3. The Distributor shall provide to each Fund for review by the Board of
Trustees, and the Trustees shall review at least quarterly, a written
report complying with the requirements of Rule 12b-1 of the amounts
expended under the Plan and purposes for which such expenditures were made
during such period.
4. This Plan shall not take effect with respect to a Fund until (i) it has
been approved by votes of a majority of both (a) the Trustees of the Fund
and (b) those Trustees of the Fund who are not "interested persons" of the
Fund, as defined in the Investment Company Act, and have no direct or
indirect financial interest in the operation of this Plan or any
agreements related to it (the "unrelated Trustees"), cast in person at a
meeting or meetings called for the purpose of voting on the Plan and such
related agreements; and (ii) the Investment Management Agreement between
each Fund and RMCI has been approved by a majority vote of the outstanding
voting securities of the respective Fund.
5. This Plan shall remain in effect for one year from its adoption date
and may be continued thereafter if this Plan and any related agreements
are approved at least annually by votes of a majority of both (a) the
Trustees of a Fund and (b) the unrelated Trustees of the Fund, cast in
person at a meeting or meetings called for the purpose of voting on the
Plan and such related agreements
6. This Plan may not be amended in order to increase materially the amount
to be spent for Services in respect to a Fund unless such amendment is
approved by at least a majority, as defined in the Investment Company Act,
of the outstanding Class R shares of the applicable Fund, and approved by
votes of a majority of both (a) the Trustees of a Fund and (b) the
unrelated Trustees of the Fund, cast in person at a meeting or meetings
called for the purpose of voting thereon. All material amendments to this
Plan must be approved by votes of a majority of both (a) the Trustees of a
Fund and (b) the unrelated Trustees of the Fund, cast in person at a
meeting or meetings called for the purpose of voting thereon.
7. This Plan may be terminated at any time by a majority vote of the
unrelated Trustees or by vote of a majority of the outstanding Class R
voting securities of the applicable Fund.
8. While the Plan is in effect with respect to any Fund, the selection and
nomination of Trustees who are not interested persons, as defined in the
Investment Company Act, of the Fund shall be committed to the discretion
of the Trustees who are not interested persons.
9. The obligations of the Trust under this Plan shall not be binding upon
any shareholder or Trustee of the Trust personally, but bind only the
Trust and the Trust's property; and the parties hereto represent that they
have notice of the provisions of the Declaration of Trust of the Trust
disclaiming shareholder liability for acts or obligations of the Trust.
10. All agreements with any person relating to the implementation of this
Plan shall be in writing and any agreement related to this Plan shall be
subject to termination, without penalty, pursuant to the provisions of
Section 7 hereof.
By:
11. The provisions of this Plan are severable for each Fund, and any
action provided to be taken with respect to this Plan must be taken
separately for each Fund affected by the matter.
12. The Fund shall preserve copies of the Plan and any related agreements
and all reports made pursuant to Section 3 hereof, for a period of not
less than six years from the date of the Plan, or the date of such
agreement or report, as the case may be, the first two years in an easily
accessible place.
IN WITNESS WHEREOF, the parties hereto have executed this Plan as of the date
first above written.
HALLMARK INVESTMENT SERIES TRUST
By: __________________________
RESRV PARTNERS, INC.
By: __________________________
Xxxx X. Xxxxxxxx, President
RESERVE MANAGEMENT COMPANY, INC.
By: __________________________
By:
Exhibit A
Hallmark First Mutual Fund
Hallmark Total Return Bond Fund
Hallmark Convertible Series Fund
Exhibit B
Hallmark First Mutual Fund - 0.25%
Hallmark Total Return Bond Fund - 0.25%
Hallmark Convertible Series Fund - 0.25%
